INVESTIGATING FINANCIAL CRIME; IT'S CAUSES AND IMPLICATIONS ON THE GROWTH OF SMALL BUSINESSES IN CAMEROON

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

 Financial crime presents a significant challenge to economies globally, with small and medium-sized enterprises (SMEs) being particularly vulnerable due to limited resources and detection capabilities. In Cameroon, Small and medium-sized enterprises (SMEs) have been pivotal in fostering job creation and economic vitality. They act as a catalyst for employment generation (Birch, 2019; Neumark et al., 2021; Ayyagari et al., 2021) and serve as breeding grounds for nurturing entrepreneurial skills and fostering innovation. Small businesses are flexible in keeping up with changing markets, responsive to new opportunities and quicker to adapt to capture economic upswings than large firms. However,these financial gains won't happen unless small companies continue to exist and grow. Many times, the ability to obtain financing is mentioned as being crucial to the survival and expansion of small enterprises. Furthermore, according to Ogbuanu et al.(2019), the focus on SMEs is due to their significant ability to accelerate progress towards the overall economic goal, as well as the broad use of indigenous technology solutions. However, Mba and Cletus (2021) contend that even while they serve as a catalyst for higher levels of national production and a launching pad for the global export market.

Additionally, Collins English Dictionary, cited by Fakile and Adegbie (2019), defines corporate financial crime as any act of dishonesty, trickery, sharp practice, or breach of confidence that is carried out for financial gain or to obtain an unfair or dishonest advantage. On the other hand, fraud was defined by the Association of Certified Fraud Examiners (ACFE) as "any illegal acts characterised by deceit, concealment, or violation of trust." Further,  ACFE (2018), these behaviors are independent of the use of violence or the fear of violence.

Financial crimes are clearly committed by people and organizations to get access to cash, assets, or services; to evade paying for or losing services; or to gain a competitive edge for themselves or their businesses.Therefore, a survey will be conducted to investigate financial crime; it's causes and implications on the growth of small businesses in Cameroon.

1.2 Statement of the Problem

The enduring repercussions of the global financial crisis, ongoing financial uncertainty, and the dispersion of risk in credit markets are exerting downward pressure on job creation and income stability in Cameroon and numerous OECD countries. This situation underscores the importance of reevaluating the influence of firms' access to financial resources on labor market results. However, policies aimed at guiding and bolstering employment and competitiveness, while also maintaining financial stability, must be grounded in an understanding of how firms' financial constraints impact employment, wages, and economic growth. This knowledge is essential for correctly targeting solutions at businesses that are hindered by inadequate funding. Thus, it is in the light of these that the study seeks to investigate financial crime; it's causes and implications on the growth of small businesses in Cameroon

1.3  Objectives of the Study

The main purpose of this study is to investigate financial crime; it's causes and implications on the growth of small businesses in Cameroon. Specifically, the study will;

1. Determine the extent to which financial crimes are perpetrated in small and medium scale businesses in Cameroon.

2.Assess the forms of financial crime perpetrated in small and medium scale businesses in Cameroon.

3.Investigate the factors contributing to financial crime occurrence in small and medium scale businesses in Cameroon.

4. Investigate the diverse effect of financial crime on the small businesses growth in Cameroon

1.4 Research Questions

The following questions have been prepared for the study:

To what extent are financial crimes perpetrated in small and medium scale businesses in Cameroon?

What forms of financial crime are commonly perpetrated in small and medium scale businesses in Cameroon?

What factors contribute to the occurrence of financial crimes in small and medium scale businesses in Cameroon?

How do financial crimes affect the growth of small businesses in Cameroon?

1.5  Research Hypotheses

Ho: There is no significant effect of financial crime on growth of small and medium scale businesses in Cameroon.

Ha: There is a significant effect of financial crime on growth of small and medium scale businesses in Cameroon.

1.6  Significance of the Study 

The study on financial crime and its implications on small and medium-sized enterprises is highly relevant to the country's business community, economy, and economy at large. The research findings, when combined with the incidence of insider fraud within the organization, which can lead to financial crime and harm the company's reputation, will assist businesses, financial institutions, and other institutions vulnerable to fraud in reducing the threat of financial crime. This is due to the fact that this research will both identify the several forms of financial crime that affect Cameroon's small and medium-sized enterprises and suggest remedies for the canker worm known as fraud. Additionally, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to investigate financial crime; it's causes and implications on the growth of small businesses in Cameroon.

1.7 Scope of the study

The scope of this study is to investigate financial crime; it's causes and implications on the growth of small businesses in Cameroon. Empirically, this study will examine the causes of money laundering, assess the patterns of money laundering, assess the consequences of money laundering in Cameroon and proffer strategies for mitigating the occurrence of money laundering in Cameroon.

Geographically, the study will be delimited to residents of Buea, Cameroon.

1.8 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. 

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

 1.9 Definition of Terms

Business Growth: Business growth is a stage where an organization experiences unprecedented and sustained increases in market reach and profit avenues. Business growth refers to the increase in a company's size, revenue, market share, and profitability over time. 

Financial Crimes: The term `financial crimes’ covers offenses which are securities-related and involves the movement, transfer or use of monetary instruments in circumstances which render such act unlawful. 

Fraud: The level of fraud in the country today has assumed an unenviable height. It has eaten deep into the nation’s Fabrics that no sector is spared. It has over the time undergone some levels of refinement and sophistication.